Question 1

Match each item with the correct statement below.
-Number of units of output that can be produced in a give period of time

Accepted Answer

A) Cycle time 
B) Non-value added 
C) Velocity 
D) Quality 
E) Value-added activities
F)Efficiency 
A) Cycle time 
B) Non-value added 
C) Velocity 
D) Quality 
E) Value-added activities
F)Efficiency

Question 2

$$\begin{array} { l r r r r } 
\text { Product } & \text { Machine Hours } & \text { Setups } & \text { Receiving Orders } & \text { Packing Orders } \
\text { basic } & 20,000 & 200 & 100 & 800 \
\text { deluxe } & 20,000 & 500 & 400 & 4,000 \
\text { Costs } & \$ 80,000 & \$ 60,000 & \$ 10,000 & \$ 30,000
\end{array}$$
-Refer to the Figure.What is the activity rate for packing that is based on packing orders?

Accepted Answer

A)  $1.20 per packing order 
B)  $6.25 per packing order 
C)  $9.00 per packing order 
D)  $10.00 per packing order 
A)  $1.20 per packing order 
B)  $6.25 per packing order 
C)  $9.00 per packing order 
D)  $10.00 per packing order

Question 3

To calculate an activity rate,the practical capacity of each activity must be determined.

Accepted Answer

A) True 
 B)False

Question 4

Cycle time is the length of time required to produce one product.What is the term for the number of units that can be produced in a given period of time?

Accepted Answer

A)  velocity 
B)  cycle production 
C)  activity time 
D)  activity output 
A)  velocity 
B)  cycle production 
C)  activity time 
D)  activity output

Question 5

Which of the following focuses on the relationship of activity inputs to activity outputs?

Accepted Answer

A)  quality 
B)  efficiency 
C)  time 
D)  cycle time 
A)  quality 
B)  efficiency 
C)  time 
D)  cycle time

Question 6

Consider the following two activities: performing warranty work and purchasing components.The warranty work costs $60,000,and the warranty cost of the most efficient competitor is $10,000.Purchasing components costs $100,000 (5,000 purchase orders).A study reveals that the most efficient level would use 2,500 purchase orders and entail a cost of $55,000. What is the non-value-added cost?

Accepted Answer

A)  $45,000 
B)  $55,000 
C)  $60,000 
D)  $105,000 
A)  $45,000 
B)  $55,000 
C)  $60,000 
D)  $105,000

Question 7

Refer to the Figure.Suppose that Tigra loses $2,500,000 in sales per year because of its reputation for defective units attributable to failed components.Using warranty hours,assign the proportional cost of lost sales to Customer 2 Company.What would be the new cost per unit as a result of the lost sales?

Accepted Answer

A)  $11.34 per unit 
B)  $20.00 per unit 
C)  $44.11 per unit 
D)  $55.00 per unit 
A)  $11.34 per unit 
B)  $20.00 per unit 
C)  $44.11 per unit 
D)  $55.00 per unit

Question 8

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

Accepted Answer

A) True 
 B)False

Question 9

Activity attributes are financial and nonfinancial information items that describe individual activities.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT a component of process value analysis?

Accepted Answer

A)  driver analysis 
B)  velocity 
C)  activity analysis 
D)  performance measurement 
A)  driver analysis 
B)  velocity 
C)  activity analysis 
D)  performance measurement

Question 11

A company has developed a list of quality-related costs as follows: $\begin{array}{lrr}& \text { Year 1 } &  \text { Year 2 } \
\text { Supplier evaluation } & \$  0 & \$  70,000 \
\text { Quality training } & 10,000 & 50,000 \
\text { Inspection of finished product } & 75,000 & 60,000 \
\text { Rework } & 50,000 & 40,000 \
\text { Warranty work } & 120,000 & 80,000 \
\text { Sales } & \$ 2,000,000 & \$ 2,000,000
\end{array}$ The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality.Is the controller right? Explain.

Accepted Answer

A good answer might include the followin

Question 12

A company was evaluating the activity-based environmental cost of two different products: Product ABC and Product XYZ.Information on two environmental activities is as follows: $$\begin{array} { l l r } 
\text { Activity } & \text { Driver } & \text { Cost } \
\text { Maintaining pollution equipment } & \text { Maintenance hours } & \$ 120,000 \
\text { Toxic waste disposal } & \text { Kilograms of waste } & 80,000
\end{array}$$ Data on Product X and Product Y follows: $\begin{array}{lrr}&\text { Product } \mathrm{ABC}& \text { Product } \mathrm{XYZ}\
\text { Production costs (non-environmental) } & \$ 400,000 & \$ 500,000 \
\text { Units produced } & 100,000 & 200,000 \
\text { Maintenance hours for pollution equipment } & 1,000 & 4,000 \
\text { Pounds of toxic waste } & 10,000 & 30,000
\end{array}$ A. Assign the environmental activity costs to Froduct $ \mathrm{ABC} $ and to Froduct $ \mathrm{XYZ} $.
B. Calculate the unit environmental cost of Froduct $ A B C $.
C. Calculate the unit environmental cost of Froduct XYZ.
D. Calculate the overall unit cost of Product ABC.
E. Calculate the overall unit cost of Product XYZ.

Accepted Answer

The answer of A company was evaluating the activity-based environmental...

Question 13

What type of costs are scrap and retesting?

Accepted Answer

A)  unavoidable failure costs 
B)  external failure costs 
C)  internal failure costs 
D)  cycle failure costs 
A)  unavoidable failure costs 
B)  external failure costs 
C)  internal failure costs 
D)  cycle failure costs

Question 14

Each unit of a product requires eight components.The average number of components is 8.25 due to component failure.Purchasing higher quality components can reduce the average number of components to four per unit.The cost per component is $500.What is the reduction in failure costs per unit due to purchasing higher quality components?

Accepted Answer

A)  $43.75 
B)  $125.00 
C)  $175.00 
D)  $350.00 
A)  $43.75 
B)  $125.00 
C)  $175.00 
D)  $350.00

Question 15

What quality-control method involves sampling from batches of finished goods to determine whether they meet an acceptable quality level?

Accepted Answer

A)  process acceptance 
B)  product acceptance 
C)  quality acceptance 
D)  velocity acceptance 
A)  process acceptance 
B)  product acceptance 
C)  quality acceptance 
D)  velocity acceptance

Question 16

Consider the following information on activities: $$\begin{array} { l r r r } 
& \begin{array} { r } 
\text { Amount of } \
\text { Driver That }
\end{array} & \text { Actual } & \text { Cost per Unit } \
\text { Activity (driver) } & \text { Should be Used } & \text { Amount Used } & \text { of Driver } \
\text { Purchasing (purchase orders) } & 48,000 & 53,000 & \$ 40 \
\text { Inspection (inspection hours) } & 0 & 22,000 & \$ 30 \
\text { Rework (labour hours) } & 0 & 13,000 & \$ 20
\end{array}$$ 
A.	Which of the three activities, if any, is value-added?
B.	What is the non-value-added cost of each activity?
C.	What is the total value-added cost of the activities?

Accepted Answer

The answer of Consider the following information on activities: \[\begin{array}...

Question 17

Refer to Netplay Company. A. What is the plantwide overhead rate based on machine hours?
B. Assuming a plantwide overhead rate, what is the unit cost of the basic model?
C. Assuming a plantwide overhead rate, what is the unit cost of the premium model?

Accepted Answer

The answer of Refer to Netplay Company. A. What is...

Question 18

A work distribution matrix is derived from an interview or a written survey.

Accepted Answer

A) True 
 B)False

Question 19

What type of costs are packaging inspection and process acceptance?

Accepted Answer

A)  external failure costs 
B)  prevention costs 
C)  appraisal costs 
D)  value costs 
A)  external failure costs 
B)  prevention costs 
C)  appraisal costs 
D)  value costs

Question 20

Match each item with the correct statement below.
-Result or product of an activity.

Accepted Answer

A) Activity analysis 
B) Value-added costs 
C) Velocity 
D) Activity inputs 
E) Activity output measure
F)Activity output 
A) Activity analysis 
B) Value-added costs 
C) Velocity 
D) Activity inputs 
E) Activity output measure
F)Activity output

Match each item with the correct statement below. -Number of units of output that can be produced in a give period of time

Product Machine Hours Setups Receiving Orders Packing Orders basic 20,000 200 100 800 deluxe 20,000 500 400 4,000 Costs \ 80,000 \ 60,000 \ 10,000 \ 30,000 -Refer to the Figure.What is the activity rate for packing that is based on packing orders?

To calculate an activity rate,the practical capacity of each activity must be determined.

Cycle time is the length of time required to produce one product.What is the term for the number of units that can be produced in a given period of time?

Which of the following focuses on the relationship of activity inputs to activity outputs?

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

Activity attributes are financial and nonfinancial information items that describe individual activities.

Which of the following is NOT a component of process value analysis?

What type of costs are scrap and retesting?

What quality-control method involves sampling from batches of finished goods to determine whether they meet an acceptable quality level?

Refer to Netplay Company. A. What is the plantwide overhead rate based on machine hours? B. Assuming a plantwide overhead rate, what is the unit cost of the basic model? C. Assuming a plantwide overhead rate, what is the unit cost of the premium model?

A work distribution matrix is derived from an interview or a written survey.

What type of costs are packaging inspection and process acceptance?

Match each item with the correct statement below. -Result or product of an activity.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 7: Activity-Based Costing and Management

Match each item with the correct statement below. -Number of units of output that can be produced in a give period of time

Product Machine Hours Setups Receiving Orders Packing Orders basic 20,000 200 100 800 deluxe 20,000 500 400 4,000 Costs \ 80,000 \ 60,000 \ 10,000 \ 30,000 -Refer to the Figure.What is the activity rate for packing that is based on packing orders?

To calculate an activity rate,the practical capacity of each activity must be determined.

Cycle time is the length of time required to produce one product.What is the term for the number of units that can be produced in a given period of time?

Which of the following focuses on the relationship of activity inputs to activity outputs?

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

Activity attributes are financial and nonfinancial information items that describe individual activities.

Which of the following is NOT a component of process value analysis?

What type of costs are scrap and retesting?

What quality-control method involves sampling from batches of finished goods to determine whether they meet an acceptable quality level?

Refer to Netplay Company. A. What is the plantwide overhead rate based on machine hours? B. Assuming a plantwide overhead rate, what is the unit cost of the basic model? C. Assuming a plantwide overhead rate, what is the unit cost of the premium model?

A work distribution matrix is derived from an interview or a written survey.

What type of costs are packaging inspection and process acceptance?

Match each item with the correct statement below. -Result or product of an activity.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters